India energy storage boom: Battery capacity set to jump tenfold in 2026; major projects, policy support to drive surge

India is expected to see a sharp surge in battery energy storage capacity this year, with additions likely to rise almost ten times to around 5 GWh in 2026 from 507 MWh in 2025, driven largely by a massive pipeline of projects now moving into the execution stage.According to a study released by the India Energy Storage Alliance (IESA), the coming year will mark a turning point for the sector as projects awarded over the past two years begin to come on stream. While 2025 was marked by record tendering activity, 2026 is expected to test the industry’s ability to deliver projects on the ground within typical timelines of 18 to 24 months.IESA said that 2025 witnessed an unprecedented tendering spree, with 69 tenders amounting to 102 GWh of capacity. This was nearly equal to the total tenders issued between 2018 and 2024 combined. As a result, cumulative capacity under execution rose sharply by 84 per cent to 224 GWh, setting the stage for large-scale commissioning in 2026.“India’s energy storage sector is poised for a transformative breakout in 2026,” IESA said in a statement, adding that the shift from awarding contracts to implementing projects represents a critical inflection point for the industry.IESA President Debmalya Sen cautioned that performance and financing will be key challenges going forward. “All eyes will remain on whether the performance of these projects is in line with what was committed,” Sen said, noting that securing funding, especially for projects awarded at low tariffs, will be a major test as several projects enter the operational phase.One of the most striking trends highlighted in the report is the sharp fall in tariffs seen in 2025. Standalone two-hour battery energy storage system tariffs dropped from Rs 2.21 lakh per MW per month in early 2025 to Rs 1.48 lakh per MW per month by the end of the year in an APTRANSCO tender. Solar-plus-four-hour BESS projects also saw aggressive pricing, with tariffs falling to the Rs 2.70–2.76 per unit range, as more than 50 new bidders entered the market.Several high-profile projects are expected to shape the sector’s trajectory in 2026. March will be closely watched as Adani commissions a 1,126 MW/3,530 MWh battery storage project in Gujarat, described as one of the world’s largest single-location BESS installations. January is also set to see Rajasthan float a tender for India’s largest solar-plus-BESS project at Pugal Solar Park. The commercial and industrial segment is also gaining traction following Juniper Green Energy’s 60 MWh merchant BESS installation in December.“The transition from tendering to execution in 2026 represents a watershed moment for India’s energy storage sector,” said Vinayak Walimbe, managing director of Customized Energy Solutions, as reported by PTI.The report also pointed to strong policy support, including a second tranche of Viability Gap Funding worth Rs 5,400 crore for 30 GWh of standalone BESS, along with a 20 per cent domestic value addition requirement.In addition, interstate transmission system charge waivers for pumped storage and solar-plus-BESS projects have been extended until 2028.